Dec 16 (Reuters) - Drugmaker Valeant Pharmaceuticals
International Inc on Wednesday said that
fourth-quarter profit was hit when it cut ties with pharmacy
Philidor Rx Services, but that it could contain the damage next
year and grow profit.

The company said it would rebuild lost business through a
distribution agreement with Walgreens pharmacies announced on
Tuesday, and said the arrangement would also help sales of
products like Xifaxin for irritable bowel syndrome and Addyi, a
new sexual dysfunction treatment for women.

The Canadian drugmaker forecast 2016 earnings would grow 30
percent to $13.25 to $13.75 per share off a lowered 2015
outlook, just below Wall Street's highest expectations.

Valeant shares rose 8 percent to $118.75 in New York
trading, gaining ground as Chief Executive Michael Pearson led
investors through a four-hour meeting in which he defended the
company's plan to rebuild its dermatology business.

In October, shortseller Citron Research accused Valeant of
having inflated revenue, and several news outlets including
Reuters reported on how Philidor used aggressive tactics to try
to increase insurer reimbursement, mostly for dermatology drugs.
Valeant has denied the shortseller accusations and a board
committee is investigating the Philidor situation.

The news had knocked shares from an August high of $263.70
to a low of $69.34 on Nov. 18. They have since recovered, helped
in part as its largest investor, Bill Ackman's Pershing Square
Capital Management, increased its stake.

Pearson declined to give an update on the investigation, or
comment on investigations by U.S. prosecutors in New York and
Massachusetts and by Congress over the company's history of
price increases and its patient access programs.
Continued...